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© 2012 Grant Thornton South Africa. All rights reserved.© 2017 Grant Thornton. All rights reserved.© 2016 Grant Thornton. All rights reserved.
The South African Tourism Sector :
An Economic Outlook
Gillian Saunders
April 2017
© 2017 Grant Thornton. All rights reserved.
Global Tourism Performance
© 2017 Grant Thornton. All rights reserved.
• 2015 4,5% arrivals growth
• 2015 3,6% receipts growth (blended local currency)
Global International Tourism Growth
529562
588 604 626677 676 696 690
761807
853908 927
891949
9951035
1067
11331184
403437 436 443 457 476 466 485
533
634679
743
857
987
905
986
11041146
12361295
1232
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
International arrivals (millions) International Tourist Receipts (US$bn)
© 2017 Grant Thornton. All rights reserved.
Lower growth at 3,0% pa
- 2020 – 3,3%
2020 – 2030 – 2,9%
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Almost 60% of arrivals are to
emerging economies
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Africa reaches 134m arrivals
Growth at 5,3 % pa
2013 – 2020 – 6,1%
2020 – 2030 – 4,7%
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Africa share grows from 3% to 7%
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
Global International Tourism
© 2017 Grant Thornton. All rights reserved.
• Global growth in international tourism arrivals continues
• More moderate pace, from 4,2% per year (1980-2020) to 3,3% (2020 -2030):
• Substantial potential for further expansion in coming decades
• Established as well as new destinations can benefit
• provided adequate conditions and policies:
• business environment
• infrastructure
• facilitation
• marketing
• human resources
• challenges
• maximising social and economic benefits
• minimising negative impacts
the long-term tourism growth pattern:
more moderate, sustainable and inclusive
Global Outlook
© 2017 Grant Thornton. All rights reserved.
Global League Tables - Inbound
© 2017 Grant Thornton. All rights reserved.
Global League Tables - Inbound
© 2017 Grant Thornton. All rights reserved.
Africa Tourism Performance
© 2017 Grant Thornton. All rights reserved.
Tourist Arrivals – World vs Africa
© 2017 Grant Thornton. All rights reserved.
- 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000
South AfricaBotswana
ZimbabweMozambique
NamibiaUganda
KenyaTanzania
GhanaMauritiusSwazilandCameroon
ZambiaRwandaSenegalMalawi
EthiopiaAngolaNigeria
Cabo VerdeCote d'Ivoire
LesothoReunion
CongoTogo
BeninSeychelles
MadagascarBurkina Faso
Dem. Rep. CongoMali
GambiaNigerChad
Sierra LeoneDjibouti
Guinea-BissauGuinea
2014 2013
International Arrivals to African Countries
© 2017 Grant Thornton. All rights reserved.
Tourism Competitiveness
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
WEF Tourism Competitiveness
Ranking 2015
East and
Southern Africa
Eastern & Southern
Africa Rank
Global Rank
South Africa 1 48
Seychelles 2 54
Mauritius 3 56
Namibia 4 70
Kenya 5 78
Botswana 7 88
Tanzania 8 93
Rwanda 9 98
Zambia 10 107
Swaziland 11 108
Uganda 14 114
Zimbabwe 15 115
Ethiopia 17 118
Madagascar 19 121
Malawi 22 126
Lesotho 24 129
Mozambique 25 130
Burundi 28 135
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
WEF Tourism Competitiveness
Enabling Environment 86 4.38
Business Environment 15 5.35
Safety and Security 119 4.30
Health and Hygiene 114 3.85
HR & Labour Market 105 4.09
ICT Readiness 62 4.29
T&T Policy & Conditions 72 4.14
Prioritization of Travel & Tourism 46 4.88
International Openness 102 2.38
Price Competitiveness 42 4.99
Environmental Sustainability 56 4.29
Infrastructure 50 3.97
Air Transport 48 3.28
Ground & Port 63 3.59
Tourist Service Infrastructure 40 5.02
Natural and Cultural Resources 15 3.83
Natural Resources 22 4.28
Cultural & Business Travel 20 3.39
Ranking 2015
South Africa
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
Demographic shifts
• Ageing
• The number of elderly will explode
• Surprisingly, 90% of this growth will take place in
emerging markets
• Non-retirement will increasingly be a major theme.
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
The Wealthy
• In America over 50s control 75% of the country's wealth
• The UK’s 17 million Baby Boomers hold an estimated 80%
of the country’s wealth
• Australia’s 5,25 million Baby Boomers own almost 35% of
Australia's superannuation assets and 50% percent of
total household wealth
• Baby Boomers – aim to stay mentally and physically fit –
"forever young"
• Travel is a high priority for Baby Boomers.
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
The Wealthy
• High Net Worth Individuals’ wealth grew 4% in 2015 to US$61.1 trillion
• The global population of HNWIs grew 4.9% to 16.11 m
• The US has largest HNW segment
– the number of HNWIs in the country expanded to 4.4 m an increase of 8.6%, while the investable wealth grew by 9.4% to US$15.2 trillion.
– since 2008, US has accounted for 28.6% of new HNWI wealth added globally
• Asia-Pacific
– strongest rates of HNWI population growth – 9.4% to 5.1 m
– surpassed Europe with HNWI population 4.2 m lower than the global average growth rate of 4.9%, due to Europe's ongoing fragile economic recovery
• The HNWI population is becoming more fragmented across the globe
• Ultra-HNWI - grew by 4.2% in 2015 and its wealth by 2.5%
• Ultra-HNWIs accounted for around 35% of global HNWI wealth – but only 0,9% of the global HNWI population.
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
The Consumer Psyche
• Cartography of the emerging consumer psyche - ConsumerShift Andy Hines
• Authenticity, Connection, Anti-Consumerism, Self-Expression, & Enoughness
• Modern, Post Modern, Integral
• "Mindful Consumption " – "Deep Travel" idiosyncrasies and detail
• "slow travel" boat, bike and train
• Give back to destinations
• "Carbon guilt" – geo-local travel
• "mass localisation" - not if, but when!
• Hyper-local sourcing
• Reflect my values
• Spending my money and time
• Declining trust in brands (gen Y)
The Question is – will emerging market consumers adopt this Psyche?
© 2017 Grant Thornton. All rights reserved.
South African Tourism
© 2017 Grant Thornton. All rights reserved.
0
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
16 000 000
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Visitors Tourists (incl) Tourists (Excl)
International visitor & tourist arrivals for
South Africa
Source: Statistics South Africa
Note: Stats SA started publishing information on TOURISTS as defined by United Nations World Tourism Organisation ("UNWTO") with the January
2009 data. Prior to this the volume of TRAVELLERS and VISITOR'S were only reported on.
6,9 %
average annual growth
3,7%
average annual
growth
© 2017 Grant Thornton. All rights reserved.
*SAT reports on Africa Land markets as all neighbouring country tourist arrivals, not tourist arrivals at border posts, we use actual StatsSA
Border post arrivals. SAT percentages of holiday makers are on the same basis, but we apply to actual arrivals as indicative
Foreign Tourism
Overseas African Air* African Land Total
Total Tourists
2016 2 531 046 635 950 6 877 167 10 044 163
2015 2 144 988 600 464 6 145 650 8 891 102
Growth 16/15 18.0% 5.9% 11.9% 13.0%
% Tourists 2016 25.2% 6.3% 68.5% 100.0%
Holiday Tourists - 2015
No. on Holiday 916 684 114 088 534 672 1 565 443
% Holiday tourists 58.6% 7.3% 34.2% 100.0%
Holiday Tourist growth 15/14 -10.1% -4.7% -23.2% -14.7%
% of total on holiday 42.7% 19.0% 8.7% 17.6%
Length of Stay - 2015
Average length of stay - nights 13.8 14.9 7.6 9.5
Most common length of stay 7 -1 4 6 3 5
Spend - 2015
Average spend in SA per tourist R 16 164 R 19 200 R 5 200 R 8 100
Average spend in SA per Holiday Tourist R 17 867 R 19 600 R 4 900 R 12 900
Average Spend per business traveller R10 400 - R22 500 R12 600 - R68 700 R6 400 - R14 900 R9 300 - R15 100
Total Tourist Spend - Excl Capital spend R24.9bn R3.5bn R35.5bn R63.9bn
Average pre-paid expenditure R40 000 - R58 000 R 14 200 R 1 000 R 16 000
Day Visitors -
2015 207 039 71 418 4 769 671 5 048 128
© 2017 Grant Thornton. All rights reserved.
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
% Change in Tourists from Europe
© 2017 Grant Thornton. All rights reserved.
Overseas Tourists
UK18%
Germany12%
Oher Europe16%
France6%
Italy2%
Netherlands6%
Russia0%
USA14%
Canada2%
Mexico0%
Brazil2%
Other C&S America1%
Australasia5%
Saudi Arabia0%
UAE0%
Middle East2%
China5%
India4%
Rep. of Korea1%
Philippines0%
Taiwan0%
Indonesia0%
Other Asia3%
© 2017 Grant Thornton. All rights reserved.
SADC Other1%
Angola1%
Botswana9%
Lesotho24%
Malawi2%
Mozambique18%
Namibia3%
Swaziland12%
Zimbabwe28%
Zambia2%
Tanzania17%
East & Central Africa Other
14%
Kenya13%
Uganda6%
West Africa Other6%
Ghana8%
Nigeria29%
North Africa7% African
Tourists255 800
7 275 700
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International Tourists – Activities Undertaken
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Most Positive Experience
© 2017 Grant Thornton. All rights reserved.
International Tourists - Most Visited Attractions &
Landmarks
0 200000 400000 600000 800000 1000000
Cape Town Central City
V&A Waterfront
Table Mountain Cableway
Cape Point
The Winelands
Robben Island
The Garden Route
Kruger Park
Apartheid Museum
Durban beach front
Tour of Soweto
Whale watching
Beaches Wild Coast
The Karoo Ostrich farms
Lion and Rhino Park
Cape Town township tours
Blyde River Canyon God's Window
Cape Agulhas
Cango Caves
West Coast
© 2017 Grant Thornton. All rights reserved.
Domestic Tourism
Day Trips
VFR Holiday Business Religious Total
No. Tourists Trips 2014 20.7 2.8 1.6 2.2 28.0
No. Tourists Trips 2015 17.4 2.7 2.4 1.7 24.5
Tourist Trip Growth 15/14 -15.94% -3.57% 50.00% -22.73% -12.50%
% Tourists 2015 71.02% 11.02% 9.80% 6.94% 100.0%
Average Tourist Length of Stay nts (2015) 4.4 5.4 2.9 2.0 4.2
Average Spend per Tourist Trip in Rand (2015) 710 2170 1890 490 960
Total Tourist Spend 2015 - Rbn 12.4 5.9 4.5 0.8 23.5
Day Trips 2015 (m) 224.8
Day Trips Growth 15/14 -8.58%
Day Trip Average Spend 380
Day Trip Total Spend Rbn 123.3
Overnight Trips
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Domestic Tourism – Province of Origin
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Domestic Tourism – Provinces Visited
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Domestic Tourism – Accommodation Utilised
© 2017 Grant Thornton. All rights reserved.
Domestic Tourism Activities Undertaken
© 2017 Grant Thornton. All rights reserved.© 2017 Grant Thornton. All rights reserved.
Economic Contribution of Tourism
Source: WTTC
South Africa Travel & Tourism
Contribution to GDP and Jobs
2013 2014 2015 2025
Real
2015-
2025
CAGR
Direct Contribution to GDP
Rand (billion) 108.8 113.4 117.8 184.7
Real growth (%) 2.00% 4.30% 3.80% 4.60%
% share 3.00% 3.00% 3.40%
Total Contribution to GDP
Rand (billion) 345.7 357 369.3 561.4
Real growth (%) 4.30% 3.30% 3.40% 4.30%
% share 9.50% 9.40% 10.40%
Direct Contribution to Employment
Number of jobs ('000) 645.5 679.6 705.6 947.5
Growth (%) 3.00% 4.90% 3.80% 3.00%
% share 4.60% 4.50% 5.40%
Total Contribution to Employment
Number of jobs ('000) 1 404 1 438 1 551 2 028
Growth (%) 2.80% 4.20% 3.60% 2.70%
% share 10.00% 9.60% 13.30%
© 2017 Grant Thornton. All rights reserved.
So what is the outlook?
Various scenarios
• High scenario - address challenges & win the Africa market
• 6 – 7% growth in foreign
• 7 – 9% growth domestic
• Medium Scenario – address some challenges
• 4 – 5% growth foreign
• 5 – 6 % growth domestic
• Low scenario – bumble along
• 3% growth foreign
• 3% growth domestic
© 2017 Grant Thornton. All rights reserved.
Challenges:• Real Levels of Tourism Priority – understanding & resourcing
• "Joined-up" government - across levels & between departments
• Safety and Security
• Ground transport - Integrated public transport
• Price competitiveness
• Ease of access – air routes, visas, UBC
• Cohesive, good, destination marketing (understand our consumers) and
branding
• Public Private sector trust and cooperation
• Ease of development and operation – less red tape
• Sustainable practices
• Species and biome protection
• Human resources – skills and attitude – service – legislation
• Agility and capacity to implement
© 2012 Grant Thornton South Africa. All rights reserved.© 2017 Grant Thornton. All rights reserved.© 2016 Grant Thornton. All rights reserved.
Questions?
The South African Tourism Sector :
An Economic Outlook